Ranbaxy Laboratories Limited, India's largest pharmaceutical company, is an integrated, research based,

international pharmaceutical company, producing a wide range of quality, affordable generic medicines,
trusted by healthcare professionals and patients across geographies. Ranked 8th amongst the global
generic pharmaceutical companies, Ranbaxy today has a presence in 23 of the top25 pharmaceutical
markets of the world. The Company has a global footprint in 49countries, world-class manufacturing
facilities in 11 countries and serves customers in over 125 countries.

In June 2008, Ranbaxy entered into an alliance with one of the largest Japanese innovator companies,
Daiichi Sankyo Company Ltd., to create an innovator and generic pharmaceutical powerhouse. The
combined entity now ranks among the top 15 pharmaceutical companies, globally.

Ranbaxy has begun converting itself into a full-fledged research-based pharmaceutical company. A major
part of this effort has been the
establishment of the company's own research and development center,
which has enabled the company to begin to enter the new chemical entities
NCE) and novel drug delivery systems (NDDS) markets.

Ranbaxy is a truly global operation, producing its pharmaceutical preparations in

manufacturing facilities in seven countries, supported by sales and marketing
subsidiaries in 44 countries, reaching more than 100 countries throughout the
world. The United States, which alone accounts for nearly half of all
pharmaceutical sales in the world, is the company's largest international market,
representing more than 40 percent of group sales. In Europe, the company's
purchase of RPG (Aventis) S.A. makes it the largest generics producer in that
market. The company is also a leading generics producer in the United Kingdom
and Germany and elsewhere in Europe. European sales added 16 percent to the
company's sales in 2004. Ranbaxy's other major markets include Brazil, Russia,
and China, as well as India, which together added 26 percent to the group's sales.

Vision & Mission

The Indian pharmaceutical industry is at the center stage in the global pharmaceutical arena and Ranbaxy
is at the forefront in delivering India the centric advantages to the advanced and developing countries of
the world. Ranbaxy Laboratories Limited has excelled in its endeavor in drug research and manufacture,
providing quality products not only at par with global markets but also facilitating the same.

Ranbaxy are committed to provide quality generics at affordable prices to the patients worldwide with a
view to help bring down the healthcare costs. While the company continues to enhance the momentum of
generics business in over 125 markets, they are also accelerating drug discovery program through
collaborations and alliances. Ranbaxy is driven by its vision to achieve significant business in proprietary
prescription products by 2012 with a strong presence in developed markets. The company aspires to be
amongst the Top 5 global generic players and aims at achieving global sales of US $5 billion by 2012.

(http://www.ranbaxy.com/)
Current Scenario

Ranbaxy has a clear strategy to harness its growth potential in

emerging markets, rebuild the US business through a series of actions on products
and facilities and actualize significant revenues.

Current strategy: Hybrid Business Model (Ranbaxy – Daiichi Sankyo Deal) & business strategy is to
collaborate with partners with complementary skills – a mutually beneficial strategy for both parties
(Ranbaxy-GSK Alliance).

API Development and Production

Ranbaxy can provide Active Pharmaceutical Ingredients (API) for companies that want to manufacture
their own product or brand without incurring the time and costs associated with developing the API,
eliminating this step from the overall manufacturing process. Key advantages of using Ranbaxy's
vertically integrated system are:

Continuity of supply
Consistent quality of product
Competitive costs
Flexibility and resources to respond to changing market dynamics

Dosage Form Development and Manufacturing

Ranbaxy's experience as a global manufacturer makes it an ideal partner to take on the complex process
of solid or liquid dosage form development. Ranbaxy continually uses reverse engineering to improve
upon its development and manufacturing processes and enhance yield, with a focus on achieving greater
cost efficiencies.

Contract manufacturing
To expand product lines with minimum investment, Ranbaxy provides turnkey manufacturing services,
including API and dosage form development, to allow companies to focus on marketing and selling the
product. This is an efficient way to diversify product lines and increase profit margins, taking advantage
of Ranbaxy's manufacturing capabilities and expertise.

Sales and Marketing

Ranbaxy has set itself apart in the marketplace through the rapid expansion of its product line and its
willingness to emulate complex drug formulations. Its commitment to quickly expanding the breadth and
depth of its product line has been key to its success in the marketplace.

Ranbaxy has a commercial advantage as many of the high-profit branded drugs with expiring patents over
the next few years are in the categories where Ranbaxy has proven expertise - anti-infectives,
gastrointestinal, cardiovascular and analgesics.

RPI has a turnkey marketing group that works with other pharmaceutical companies to co-market and co-
promote a variety of chemicals and products. As a marketing partner, RPI is able to meet the marketing
needs of companies while they themselves focus their efforts on a drug's development, manufacturing,
distribution and sales.

Marketing Strategies
Marketing Strategies is the department focused primarily on developing and executing strategies for the
promotion and distribution of branded and generic products.
One of the key tasks for the department is to identify opportunities in different markets and distribution
channels and pursue those to developing and establish new relationships in the marketplace. Managed
Care and Internet marketing is a couple of key areas that the department is looking to introduce into its
ever-expanding service offerings.

Licensing
RPI prides itself on taking a creative, mutually beneficial approach to licensing arrangements. The
company is open to exploring both outward and inward licensing opportunities to fulfill unmet needs in
the marketplace.

Ranbaxy- Daiichi Sankyo Deal (combining the capabilities of an innovator and generics pharmaceutical
company)
Daiichi Sankyo (no.2 of Japan Pharma sector) has acquired 64% stake in Ranbaxy Laboratories, making it
as Daiichi Sankyo’s subsidiary. It came as an astounding announcement for the entire Indian Pharma
sector, where the number one of India’s Pharma company was acquired by a foreign player.

The deal will bring in new drugs from Daiichi's portfolio into the Indian market, and tempt Indian pharma
majors, particularly generics makers hitting a plateau in overseas markets, to sell out and realise attractive
valuations of the kind Ranbaxy has secured.

Daiichi Sankyo and Ranbaxy believe this transaction will create significant long-term value for all
stakeholders through a complementary business combination that provides sustainable growth through
diversification spanning the full spectrum of the pharmaceutical business; an expanded global reach that
enables leading market positions in both mature and emerging markets with proprietary and non-
proprietary products; strong growth potential by effectively managing opportunities across the full
pharmaceutical lifecycle; and cost competitiveness by optimizing usage of R&D and manufacturing
facilities of both companies, especially in India.

As the Japanese market is opening up for generics, Daiichi is looking at a strong generics player to gather
a strong hold in Japanese as well as global generics market. Acquiring Ranbaxy, a major generics player
one-seventh its size, at a premium of over 30% its current market price hints at the strong urge with which
the company wants to make a foray into the global pharma market.

Ranbaxy will gain easier access to the much-coveted Japanese market by operating from within the
Daiichi Sankyo fold. Ranbaxy could bypass a lot of European and U.S. companies that are finding it
difficult to enter the Japanese market, where safety and testing requirements are a lot higher.

But beyond these positive results from the alliance lie problems that could have faced Ranbaxy had it
chosen to continue alone. First, the company has thrived on selling off-patent drugs in the U.S. But this
has become a much more expensive proposition because of litigation. Second, there is growing
competition in generics at home and abroad. Finally, even as the Indian government has been insisting on
stringent quality norms, it is extending its regime of price controls. The industry contends that it simply
cannot make adequate returns on various products. "If the promoters of India's largest drug company felt
it better to exit the business after many years of attempts to make it one of the largest in the world, then
there must be serious issues with our drug policy," Swati Piramal, director of strategic alliances at
Nicholas Piramal told the Business Standard.

(http://www.dnaindia.com/money/comment_daiichi-ranbaxy-deal-a-pretty-sweet-pill-for-both-
companies_1170744 ; http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4296)
Ranbaxy and GlaxoSmithKline form alliance (2007)

Ranbaxy & GSK have signed a new, multiyear R&D agreement that modifies and expands the terms of
their strategic alliance established in 2003 to provide Ranbaxy expanded drug-development
responsibilities and further financial opportunities.

Under the original agreement, Ranbaxy conducted the optimization chemistry required to progress drug
leads to the stage of candidate selection. Under the new agreement, Ranbaxy will advance leads beyond
candidate selection to completion of clinical proof of concept. GSK thereafter will conduct further clinical
development for each program and take resulting products through the regulatory approval process to
final commercialization.

Competitors
The pharmaceutical industry is characterized by rapid advances in scientific
knowledge and ability to discover new drugs. The industry is therefore led by large
manufacturers and marketers of drugs investing heavily in research &development,
having clinical testing, marketing and distributing capabilities. Some of the main
competitors of Ranbaxy are:

• Sun Pharmaceuticals Industries - It is No. 1 in India in specialty therapy areas like psychiatry,
neurology, cardiology, gastroenterology, diabetology and respiratory.[.It has brands in 30 markets
worldwide and also has a generic presence in the U.S. with Caraco Pharm Labs, Sun Pharmaceutical
Industries Inc.

•Cipla - Cipla is a leader in the domestic retail pharmaceutical market. It also exports raw materials,
intermediates, prescription drugs, over-the-counter products, and veterinary products to some 180
countries around the world.

•Glaxo smith Kline- It is one of the oldest pharma companies in India and with a turnover of Rs. 1500
crore is one of the market leaders(market share) in India with a share of 6.2 per cent Its main portfolios
consists of anti-invectives, dermatologicals and pain management drugs

•Dr.Reddy’s Laboratories It is a global pharmaceutical company with it's headquarters in India and a
presence in more than 100 countries. In India it the biggest drug maker by sales Sales and Marketing
Ranbaxy has set itself apart in the marketplace through the rapid expansion of itsproduct line and its
willingness to emulate complex drug formulations. Ranbaxycommitment to quickly expanding the
breadth and depth of its product line hasbeen a key to its success in the marketplace.
(http://www.ranbaxy.com/investorinformation/annual_pr2009.)

Gross Profit Margin Ratio(gross profit/ net sales* 100)

Year 2004 2005 2006 2007 2008

Ratio 16.9 4.9 14.39 7.51 2.07

-From the above analysis of Gross Profit ratio, gross profit ratio is less compared to the
previous year
-If the gross profit ratio is declining that may put the management in difficulty

Gross profit margin

18
16
14
12
10
ratio

Gross profit margin

8
6
4
2
0
2004 2005 2006 2007 2008
year
Net Profit Margin Ratio

year 2004 2005 2006 2007 2008

ratio 13.81 5.78 9.07 14.33 -22.02

-Net profit ratio is less compared to the previous years

-Since net profit ratio is declining that shows the inefficiency of management

Net profit margin

20
15
10
5
0
ratio

Net profit margin

-5 2004 2005 2006 2007 2008
-10
-15
-20
-25
year
Several key challenges are currently faced by the pharma industry:

Increasing public pressure

With an abundance of information, the health awareness among consumers is increasing at an exponential
rate. They are demanding fair value and are constantly looking for greater value for the money they spend
on medicine. For example, seniors under the US Government’s Medicare programme consistently prefer
generic alternatives to branded drugs. They are astute shoppers who look for innovation. They expect
pharma to tackle the tough diseases like diabetes, obesity, and cancers to name a few. They are growing
increasingly impatient with incrementalism.

Increasing payer pressure

Similar to the society as a whole, payers are pushing for more innovation as they manage ever tightening
budgets looking for increased health outcomes. The tougher cost-containment practices by payers are
forcing pharma companies to bring forth innovation while at the same time providing disincentives for
products with marginal benefits. It will be harder for me-too or me-better medicines to be successful. In
most countries, payers are becoming even more active in determining which treatments are appropriate.
For example, the National Institute for Health and Clinical Excellence (NICE) can prevent a product from
being used in the UK. Currently, even the Institute for Quality and Efficiency in Healthcare (IQWiG) and
the Academy of Managed Care Pharmacy (AMCP) do not have that authority. Pricing transparency is
increasing as well (formerly confidential contracting information is now becoming public).

Increasing patent expirations

It is forecasted that US$ 115 billion worth of branded drugs will become generic during the period 2007
through 2012. Numerous large blockbusters that are the backbone of the organisation’s top-line and more
importantly profit are expected to be eroded by 2012 (e.g. Prevacid, Flomax, Lipitor, Crestor, Seroquel).
To illustrate, Merck & Co. is expected to face generic competition from three of its top selling products
(Fosamax, Singulair, and Cozaar)—which represent 44 per cent of the company’s revenues. This problem
has only been exacerbated by the slowing degree of FDA approvals. In 2007, the FDA only approved 19
new products and is on track to have another record year of low approvals.

Decreased R&D output

The average cost to develop innovative therapies is skyrocketing. The average price of bringing a drug to
market is now US$ 800 million. Due to the increasing costs, large pharma is increasingly turning to in-
licensing to compensate for decreases in R&D production. Since 2002, in-licensing will increase from
17.5 to 34.4 per cent by 2012. If a company seeks to in-license later stage at the last minute (and hence
reduce the risk), the law of supply and demand would govern and escalate the price level to a new height.
When seeking to acquire new assets, it is also clear that the small molecules continue to be the target of
choice (MAbs and therapeutic proteins being the preferred ones).

Increased focus by regulators on safety

While drug re-importation continues to be on the radar screen for many (including FDA), regulators
continue to impress the need for safety in the development process. FDA mandates even greater number
of patients to be used for clinical trials. Relatedly, they are looking for comparative safety of the New
Chemical Entities (NCEs) to already marketed products. This has been even more manifest by the recent
implementation by the FDA Amendments Act and the “Safety First” initiative.

Outsourcing
Clinical studies have long been outsourced as a more efficient way to get drugs to market. Contract
manufacturing has also been around as a viable source (dating back into the early 1980s). In the 1990s,
the outsourcing of the sales force became a popular decision in order to avoid the initial capital outlays
and to have a more scalable solution. This is an ever growing popular trend as of late, and will no doubt
expand into other commercial areas. Even more interesting are decisions to decouple once traditional
mainstays of the organisation like HR, finance, and accounting. However, organisations haven’t stopped
there as they are still pushing the envelope to extract value in innovative ways as evidenced by the
Lilly/Chorus relationship. In essence, Lilly licenses the drug to Chorus and has the option to buy back
after Phase II. This not only reduces the infrastructural needs of Lilly but also increases its productivity
and capital efficiency. This will also have an impact on the time-to-market of their new products.

The SWOT analysis of the industry reveals the position of the Indian pharma industry in respect to its
internal and external environment.

Strengths:

1. Indian with a population of over a billion is a largely untapped market. In fact the penetration of
modern medicine is less than 30% in India. To put things in perspective, per capita expenditure
on health care in India is US$ 93 while the same for countries like Brazil is US$ 453 and
Malaysia US$189.

2. The growth of middle class in the country has resulted in fast changing lifestyles in urban and to
some extent rural centers. This opens a huge market for lifestyle drugs, which has a very low
contribution in the Indian markets.

3. Indian manufacturers are one of the lowest cost producers of drugs in the world. With a scalable
labor force, Indian manufactures can produce drugs at 40% to 50% of the cost to the rest of the
world. In some cases, this cost is as low as 90%.

4. Indian pharmaceutical industry posses excellent chemistry and process reengineering skills. This
adds to the competitive advantage of the Indian companies. The strength in chemistry skill help
Indian companies to develop processes, which are cost effective.

Weakness:

1. The Indian pharma companies are marred by the price regulation. Over a period of time, this
regulation has reduced the pricing ability of companies. The NPPA (National Pharma Pricing
Authority), which is the authority to decide the various pricing parameters, sets prices of different
drugs, which leads to lower profitability for the companies. The companies, which are lowest cost
producers, are at advantage while those who cannot produce have either to stop production or
bear losses.

2. Indian pharma sector has been marred by lack of product patent, which prevents global pharma
companies to introduce new drugs in the country and discourages innovation and drug discovery.
But this has provided an upper hand to the Indian pharma companies.

3. Indian pharma market is one of the least penetrated in the world. However, growth has been slow
to come by. As a result, Indian majors are relying on exports for growth. To put things in to
perspective, India accounts for almost 16% of the world population while the total size of
industry is just 1% of the global pharma industry.

4. Due to very low barriers to entry, Indian pharma industry is highly fragmented with about 300
large manufacturing units and about 18,000 small units spread across the country. This makes
Indian pharma market increasingly competitive. The industry witnesses price competition, which
 reduces the growth of the industry in value term. To put things in perspective, in the year 2003,
the industry actually grew by 10.4% but due to price competition, the growth in value terms was
8.2% (prices actually declined by 2.2%)

Opportunities

1. The migration into a product patent based regime is likely to transform industry fortunes in the
long term. The new patent product regime will bring with it new innovative drugs. This will
increase the profitability of MNC pharma companies and will force domestic pharma companies
to focus more on R&D. This migration could result in consolidation as well. Very small players
may not be able to cope up with the challenging environment and may succumb to giants.

2. Large number of drugs going off-patent in Europe and in the US between 2005 to 2009 offers a
big opportunity for the Indian companies to capture this market. Since generic drugs are
commodities by nature, Indian producers have the competitive advantage, as they are the lowest
cost producers of drugs in the world.

3. Opening up of health insurance sector and the expected growth in per capita income are key
growth drivers from a long-term perspective. This leads to the expansion of healthcare industry of
which pharma industry is an integral part.

4. Being the lowest cost producer combined with FDA approved plants, Indian companies can
become a global outsourcing hub for pharmaceutical products.

Threats:

1. There are certain concerns over the patent regime regarding its current structure. It might be
possible that the new government may change certain provisions of the patent act formulated by
the preceding government.

2. Threats from other low cost countries like China and Israel exist. However, on the quality front,
India is better placed relative to China. So, differentiation in the contract manufacturing side may
wane.

3. The short-term threat for the pharma industry is the uncertainty regarding the implementation of
VAT. Though this is likely to have a negative impact in the short-term, the implications over the
long-term are positive for the industry.

(http://www.equitymaster.com/detail.asp?date=6/21/2004&story=5)

Sustainability

Ranbaxy aims for No. 1 position in generic drugs market by

2012: The drug maker has so far hired 1,500 under an
initiative for expanding its reach in smaller towns and villages
Apr. 28--India's largest pharmaceutical company by revenue, Ranbaxy Laboratories Ltd, has launched an initiative to

reach out to smaller towns and villages and invest more in research with an eye on becoming the leader in the

generic drugs market in the next two years.

The company has already hired nearly 1,500 marketing personnel since the strategy, named Viraat, was kicked off in

January--taking its workforce to 4,300. Ranbaxy is aiming to overtake Cipla Ltd as the market leader.

Ranbaxy's current market share is 4.9% against Cipla's 5.4%, according ORG IMS, a pharmaceutical market

research agency. Through Viraat, it hopes to corner 6% of the generics market by 2012, the executives said.

Two-thirds of the new hires are field personnel, who will spread out into towns and rural areas to push the company's

over-the-counter and prescription drugs. The rest have been hired at managerial levels.

India contributes 20-25% of the global business of Ranbaxy, which was acquired in 2008 by Daiichi Sankyo Co. Ltd

of Japan. But Viraat reflects a renewed focus on the domestic market since Atul Sobti replaced Malvinder Mohan

Singh as chief executive and managing director around a year ago.

Sobti said the company had been considering the new policy for some time, but had been hesitant to start as it would

push up operational costs.

"This (Viraat) has taken the costs up as well, one of the reasons why it took us two-three years. One, our big focus

was the US, also with first-to-file products. Secondly, India being home, branded generics, reputation and productivity

was also more costly," he said.

"Investing in India means (for) one-three years, you will have lesser margins. Of course, this is an investment and we

took that clear decision because the investment in human resource, new products and R&D (research and

development) has to get better," he added.

Through Viraat, Ranbaxy has already increased its customer reach from 150,000 doctors last year to around 200,000

now. By 2012, it expects to reach a minimum 350,000 doctors.

"We looked at our current products, future products and product gap, and based on that we thought this is the

number of customers required for us to reach out (to) there," said Yugal Sikri, country head for India, explaining how

Viraat was conceptualized.

For the strategy to work, Ranbaxy has divided its products into two categories--one for the masses and one for the

"classes", or residents of metros and cities.

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Apr. 28--India's largest pharmaceutical company by revenue, Ranbaxy Laboratories Ltd, has launched an initiative to

reach out to smaller towns and villages and invest more in research with an eye on becoming the leader in the

generic drugs market in the next two years.

The company has already hired nearly 1,500 marketing personnel since the strategy, named Viraat, was kicked off in

January--taking its workforce to 4,300. Ranbaxy is aiming to overtake Cipla Ltd as the market leader.

Ranbaxy's current market share is 4.9% against Cipla's 5.4%, according ORG IMS, a pharmaceutical market

research agency. Through Viraat, it hopes to corner 6% of the generics market by 2012, the executives said.

Two-thirds of the new hires are field personnel, who will spread out into towns and rural areas to push the company's

over-the-counter and prescription drugs. The rest have been hired at managerial levels.

India contributes 20-25% of the global business of Ranbaxy, which was acquired in 2008 by Daiichi Sankyo Co. Ltd

of Japan. But Viraat reflects a renewed focus on the domestic market since Atul Sobti replaced Malvinder Mohan

Singh as chief executive and managing director around a year ago.

Sobti said the company had been considering the new policy for some time, but had been hesitant to start as it would

push up operational costs.

"This (Viraat) has taken the costs up as well, one of the reasons why it took us two-three years. One, our big focus

was the US, also with first-to-file products. Secondly, India being home, branded generics, reputation and productivity

was also more costly," he said.

"Investing in India means (for) one-three years, you will have lesser margins. Of course, this is an investment and we

took that clear decision because the investment in human resource, new products and R&D (research and

development) has to get better," he added.

Through Viraat, Ranbaxy has already increased its customer reach from 150,000 doctors last year to around 200,000

now. By 2012, it expects to reach a minimum 350,000 doctors.

"We looked at our current products, future products and product gap, and based on that we thought this is the

number of customers required for us to reach out (to) there," said Yugal Sikri, country head for India, explaining how

Viraat was conceptualized.

For the strategy to work, Ranbaxy has divided its products into two categories--one for the masses and one for the

"classes", or residents of metros and cities.

"For instance, drugs for cancer, hypertension, etc., will need a more class-based approach because that is where the

market is. But our anti-infectives and over-the-counter products will require a mass approach," said Sanjeev Dani,

senior vice-president and regional director for Asia, Russia and the Commonwealth of Independent States, which

groups former Soviet republics.

Hemant Bakhru, a Mumbai-based pharma analyst with the global brokerage CLSA, said the move has been

prompted by Ranbaxy losing market share in recent years. "They were primarily focusing on international operations

and acquisitions earlier. They have realized now that India has huge potential," he said.

Bakhru said smaller firms such as Lupin Ltd, Ipca Laboratories Ltd and Piramal Healthcare Ltd do better in India

because they have nearly doubled their sales force. "But bigger companies like Ranbaxy and Dr Reddy's

Laboratories Ltd have much smaller sales force. So they are trying to bring back focus on products and marketing in

India," he said.

Although Ranbaxy refused to divulge its expenses on Viraat, Bakhru estimated the strategy's operational cost for the

year will be Rs225-250 crore.

Ranbaxy, Lupin to benefit most from Japan's push for

generics: The firms will have an edge over their Indian
counterparts that do not have a Japanese parent or subsidiary
May 17--Two of India's top drug makers, Ranbaxy Laboratories Ltd and Lupin Ltd, would reap the maximum benefits

from a significantly large generic drug opportunity opening up in Japan, the world's second largest single drug

market.

The direct link that these two firms have established in the Japanese market through cross-border equity deals will

likely help them gain a significant market share in the emerging cheap drug segment in that country.

Daiichi Sankyo Co. Ltd, Japan's third biggest drug maker, acquired a 34.8% controlling stake in Ranbaxy in 2008 in a

$4.6 billion (around Rs20,750 crore today) deal. Lupin acquired 80% of Kyowa Pharmaceutical Industry Co. Ltd in

2007.

Many other Indian companies including Dr Reddy's Laboratories Ltd, Torrent Pharma Ltd and Cadila Healthcare Ltd

are still struggling with their marketing set-ups and business strategies in Japan's tightly regulated, $80 billion drug

market. Ahmedabad-based Cadila Healthcare and Dishman Pharmaceuticals Ltd have set up subsidiaries in Japan.

The Japanese government is encouraging the use of cheap generic drugs as a large population of the elderly strains

public finances by causing it to spend more on social security. The government plans to convert at least 30% of the
country's drug prescription to low-cost generics by 2012. Currently, generic or off-patent drugs have only a 17%

market share in Japan.

"The Japanese market holds immense potential for global generic pharmaceutical companies like ours," said Nilesh

Gupta, group president of Lupin, who expects the generic drug market in Japan to grow at a "very fast clip". "The

Japanese market is a market of strategic focus for Lupin and we are the only Indian company and one of the few

global generic pharma companies to have built significant on-shore presence in Japan through our subsidiary, Kyowa

Pharmaceuticals, which is now the fastest growing (among top 10 generic companies) in the Japanese market,"

Gupta said in an email response to a query from Mint.

Email queries sent to Ranbaxy were not answered over the weekend. Pankaj Patel, chairman and managing director

of Cadila Healthcare, could not be contacted because he was travelling.

According to a report prepared by Elara Securities (India) Pvt. Ltd, while the new generic drug focus of the Japanese

government is expected to bolster Indian generic drug firms in general, the Daiichi connection and Kyowa's

established network would ensure easier market access for Ranbaxy and Lupin.

A pharma analyst associated with a foreign brokerage present in India said that the help of a locally established

parent or a subsidiary is very important for a foreign drug maker in the Japanese generics market as drug regulations

continue to be stringent. "Low-cost generic drugs are still considered inferior in this strictly regulated, patented and

branded drug market," said this analyst, who didn't want to be identified.

According to Elara, while the Japanese government plans to encourage the use of generic drugs, regulations have

not been changed to speed up their approvals.

Currently, Indian drug makers' revenues from the Japanese market are tiny compared with their sales in other

regulated markets such as the US and Europe. The strict regulatory regime and a low level of trust in foreign generic

drugs among patients and doctors have been key obstacles for Indian pharmaceutical firms in penetrating the

Japanese market.

(http://www.allbusiness.com/pharmaceuticals-
biotechnology/pharmaceutical/14362009-1.html)